14 DAY TRIAL // While most people are focusing on the rumored Google - Groupon deal, there are other interesting things happening in the group-buy space. Amazon is said to be buying a stake in LivingSocial, the number two player in the emerging market. While it doesn't have the clout of Groupon, LivingSocial is doing more than OK on its own. Amazon is said to be pouring in as much as $150 million at a valuation of over $1 billion.
All Things D is citing sources close to the deal which are saying that Amazon's move is a strategic one and that the investment will also involve deep integration between the two products.
The talks are by no means complete and may still not go through. At this point, Amazon is set to get a nice chunk of LivingSocial and a partnership which may go a long way towards making the world's largest online retailer a player in the local deals market.
So far, Amazon has failed to make much headway in this market, not that any other big player has. While Amazon would likely prefer an outright acquisition, LivingSocial wants to continue to be independent.
It has every reason to, if Groupon is out of the picture, the future is looking much brighter for LivingSocial. While Groupon won't be going anywhere under Google's tutelage, it's bound to slow down. The regulatory scrutiny, that the Google - Groupon is bound to receive, alone is enough to give LivingSocial an advantage.
LivingSocial has about 10 million subscribers, compared to Groupon's over 30 million. It is said to be making about $1 million each day from the deals it runs in five countries and over 120 markets, and is on track to make as much as $500 million in revenue next year. Some estimates say that Groupon will be making $500 million this year.